As the world follows daily news on the coronavirus, we continue to have conversations around how to better support BIPOC-Owned Businesses during this time. Nancy Nichols, Business Consultant of Meda, Patrick Pariseau, Director of Financial Solutions at Meda and Uri Camarena, Director of Business Consulting at Meda, recommend these steps for businesses during coronavirus.
- Check your financing: Contact your bank and ask for relief from large payments now. Do not wait until the situation is dire. Negotiate with your landlord and suppliers, they want you to stay in business. If you have business interruption insurance, now is the time to contact your agent.
- Staffing: Evaluate staffing needs and get acquainted with state unemployment laws. If you decide to downsize, do this with a process that allows employees to access unemployment immediately. Maximize flexibility in sick leave benefits. Do not require health care provider’s note for who are sick with respiratory illness. Be empathetic. Employee safety is paramount.
- Overhead and spending: Evaluate all your discretionary spending now. Eliminate any unnecessary costs. Contact service providers and ask for a better rate on services. Focus on cash.
- Innovate and brainstorm: Think about how your company can add value during this crisis. There may be some expertise, processes and products that you can extend in a new way that simultaneously builds business opportunities and assists others.
- Avoid predatory lenders: Predatory lending pulls roughly $9 billion dollars from small businesses. It is destructive. Regardless of the circumstances, predatory lending relationships are destructive to your business. Predatory lending could ruin your ability to restructure your loan with existing lender.
Some signs are:
The lender encouraging a borrower to frequently refinance in order to charge excessive fees and points (such as interest rates far exceeding the average), to the borrower’s disadvantage (also known as loan flipping)
Lending based on the borrower’s assets rather than an ability to repay
Deceptive, confusing, or fraudulent marketing tactics and/or representations
No credit score checked and/or very easy approval
Offers come to you unrequested, like through the mail or online
- Communicate with compassion to your employees:We are all struggling and trying to process information as fast as we possibly can. Honest, candid and transparent communication with employees will mitigate fear and panic.
- Follow CDC Guidelines:There is no benefit for placing profits above people and safety. Err on the side of caution. Your facilities, your staff are your strength. Don’t endanger them by ignoring fact-based guidance from health care experts.
- Practice Self-Care: Being an entrepreneur is a solitary path under the best of circumstances. During this type of unique and challenging scenario entrepreneurs may tend to default to simply working more and harder. Exhausting yourself by working around the clock will only make you more vulnerable to fatigue and illness. Rest, diet and wellness are your treasure. Practice self-care; entrepreneurs are a national treasure and we need you.
- Think out of the box for Small Business Assistance: This situation is evolving quickly, and resources are being formalized almost daily. Look for small business assistance relief at the City, County, State and Federal level.
- Get your house in order: If your business has been disrupted, consider digging in on projects that have been pushed aside because things were too busy.
Here are some suggestions:
- Work on your financial projections for 3, 6, and 9 months scenarios; you want to ensure that you are ready when the lender asks for this information. Keep in mind that it may take upwards of 45 days to get a loan
- Consider working on your MWBE certification. Supply chains have been disrupted on a global basis. Procurement will change. Having your MWBE certification will help you compete for contracts in the future.
- Add value through your website. Regardless of your industry, you can add thought leadership. You can add valuable content to your website and increase traffic and credibility organically.
- Educate yourself in utilizing virtual/on-line tools